Question: 1. An increase in excess reserves will cause a. the Fed Funds rate to rise. b. planned inventory investment to fall. c. depository institutions to

1. An increase in excess reserves will cause

a. the Fed Funds rate to rise. b. planned inventory investment to fall. c. depository institutions to lend more freely. d. foreign investors to buy more T-Bills.

2. A decrease in the monetary base is related to (Points : 2)

a. decrease in credit availability. b. increasing interest rates. c. decreased investment. d. All of the above

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